Correlation Between GraniteShares FAANG and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both GraniteShares FAANG and Leverage Shares at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GraniteShares FAANG and Leverage Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares FAANG ETC and Leverage Shares 2x, you can compare the effects of market volatilities on GraniteShares FAANG and Leverage Shares and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GraniteShares FAANG with a short position of Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares FAANG and Leverage Shares.
Diversification Opportunities for GraniteShares FAANG and Leverage Shares
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and Leverage is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares FAANG ETC and Leverage Shares 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 2x and GraniteShares FAANG is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GraniteShares FAANG ETC are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 2x has no effect on the direction of GraniteShares FAANG i.e., GraniteShares FAANG and Leverage Shares go up and down completely randomly.
Pair Corralation between GraniteShares FAANG and Leverage Shares
Assuming the 90 days trading horizon GraniteShares FAANG ETC is expected to generate 0.23 times more return on investment than Leverage Shares. However, GraniteShares FAANG ETC is 4.38 times less risky than Leverage Shares. It trades about 0.14 of its potential returns per unit of risk. Leverage Shares 2x is currently generating about 0.03 per unit of risk. If you would invest 3,074 in GraniteShares FAANG ETC on August 27, 2024 and sell it today you would earn a total of 1,648 from holding GraniteShares FAANG ETC or generate 53.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares FAANG ETC vs. Leverage Shares 2x
Performance |
| Timeline |
| GraniteShares FAANG ETC |
| Leverage Shares 2x |
GraniteShares FAANG and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares FAANG and Leverage Shares
The main advantage of trading using opposite GraniteShares FAANG and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares FAANG position performs unexpectedly, Leverage Shares can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Leverage Shares will offset losses from the drop in Leverage Shares' long position.| GraniteShares FAANG vs. Leverage Shares 3x | GraniteShares FAANG vs. WisdomTree SP 500 | GraniteShares FAANG vs. WisdomTree Silver 3x | GraniteShares FAANG vs. Lyxor 10Y Inflation |
| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. WisdomTree SP 500 | Leverage Shares vs. WisdomTree Silver 3x | Leverage Shares vs. Lyxor 10Y Inflation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |